Binance delists multiple TUSD trading pairs; TUSD devaluation to blame?

Binance has announced the upcoming cessation of trading for several stablecoin spot trading pairs associated with Justin Sun-linked stablecoin TrueUSD (TUSD).

The paris include COMP/TUSD, EDU/TUSD, and PENDLE/TUSD. This decision follows the platform’s routine assessment of trading pairs, aimed at maintaining market quality by considering factors such as liquidity and volume. 

The changes are scheduled for March 15, 2024, at 03:00 UTC, affecting not only these pairs but also others like ARPA/BNB and EDU/BNB. Despite the delisting, Binance added that the base and quote assets of these pairs will remain accessible through other trading options on the site. 

Additionally, the exchange said it would discontinue Spot Trading Bots services for these pairs concurrently with the trading halt.

This development followed closely on the heels of TUSD’s deviation from its peg to the US dollar earlier this year. As previous reports suggested, an imbalance in TUSD trading on Binance was observed on Jan. 15, 2024, with sell orders surpassing buy orders by over $142 million. 

This disparity resulted in TUSD’s value falling to as low as $0.984.This imbalance was further highlighted within a 24-hour trading window, where TUSD sell orders amounted to more than $339.2 million against $296.8 million in buy orders, leading to a net outflow of $42.3 million.

Further scrutiny into TrueUSD’s operations surfaced on Jan. 10, with issues reported concerning the real-time attestation of its reserves. This prompted speculation about the stablecoin’s backing, as failures in its API were noted, impairing the provision of a US dollar valuation for its collateral assets.

However, the TrueUSD team attributed the depegging event to specific activities on Binance Launchpool. They indicated that recent mining activities created short-term arbitrage opportunities, which they deemed normal aspects of market dynamics and liquidity adjustments. The team assured that redemption mechanisms involving collaborations with global banks were fully operational, facilitating uninterrupted transactions for users. 

However, a Kaiko research report revealed that TUSD was no longer utilized for mining activities on Binance Launchpool, marking a significant shift in stablecoin’s engagement with the platform. According to the report, this was a core reason for the devaluation of the Stablecoin.